>> welcome to "daybreak: australia." i'm paul allen in sydney. we are counting down to the major market opens. here are the top stories we are covering in the next hour. the power of public spending, japan ready to embrace abenomics ' biggest spending program. thousands of hong kong protesters give thanks for u.s. support. washington now awaits china's next move. president trump greets troops in

afghanistan. both sides want a cease-fire. we areake a look at how shaping up for trading on the final trading day of the week in asia. we do have one market up and running, new zealand, trading for about an hour now, currently higher by 0.5%, continuing to hover around record highs for the index. sydney is poised to open higher as well. futures currently up by 0.4%. different story elsewhere in asia. y akei futures, weaker b little more than 0.4%. the kospi is looking flat as well. we are expecting a fair bit of data out of japan and south korea today. we will break that as we get it. we will provide analysis as well. let's get a little more on the markets now. theinued speculation that

reserve bank of australia will be delivering more stimulus. shares have hit another record. we have the final policy decision for the rba due next week. our next guest says it is three rate cuts in six months that will supercharge the markets. the chief market strategist of investment joins us now -- of invest smart joins us now. asx hovering around record highs. there are not too many by ratings on aussie stocks -- buy ratings on aussie stocks. is it just so hard to find value right now? >> that's probably the way to answer the question. it's a 16-year low in the amount of buy recommendations from analysts. value is hard to find. the value that is their is there for a reason. the stocks that have not caught this rally that's been going on now for almost three years, it's because they are deliberately at

a discount. they've had significant issues or there are underlying value causes to put them at a discount. you can ask that question. what you're seeing on screen is that the whole market is -- the target coming from the rba is clear. you can take a lot out of what happened on the open yesterday, after tuesday nights talk by philip lowe -- tuesday night's talk by philip lowe. we have a clear overly optimistic rba. there view around -- their view around where they see inflation this time next year and at the end of 2021 in most people's view, including myself, is optimistic. it's unlikely to be reached. expectations around a further two rate cuts -- he outlined, if we go down the qe path, the cash rate would

have to fall to 0.25 of 1%. it is 40%. the expectations have gone through the roof on the idea that further stimulus is coming. qe, although he believes it's not likely to happen, the market do., most economists when you have a hugely accommodative monetary system like we do in australia at the moment, it's not just housing that benefits from that stimulus. australia, although we didn't go through the level that we saw in the u.s. or europe during 2009, we are certainly playing catch-up now. paul: yeah. in terms of the immediate future for the rba, the final meeting of the year on tuesday. there won't be another one till february. there's not meeting in january. do you expect they will move on tuesday or hold off? >> they probably won't.

yesterday -- you look at the minutes that came out a week and a half ago. y almost pushed the button in november. why is becoming a little more of a probability it will happen early 2020 rather than may-april when it was originally forecast, the last bastion that had been holding out, employment, has started to fade at the back end of 2019. you look at numbers from september, october. we get the numbers from november in a week. they are slowing. part of the core mandate from the rba is full employment. unemployment is taking up -- ticking up. as far as records go, it is holding at a record high, underemployment. until that moves, there is no inflation coming either, because wages are not growing.

. i don't think they will go next tuesday. if we see in december and also in january that employment continues to go the other right -- other direction, don't be surprised if they push the button early in february. paul: you were talking about those remarks earlier this week where it's at the table for what's going to be required in the terms of qe and thresholds to be reached. he gently needled the government about putting some fiscal stimulus together. politically, that's not really us darter -- a starter for the government, which has campaigned heavily on getting the budget back into black. there's another issue no government wants to see, the aaa evaporate on their watch. is that consideration? -- is that a consideration? >> partly. neither moody's nor s.a.p. have signaled that is a possibility in the interim.

it does not put that kind of pressure yet. what i would say is not exactly a fantastic look if you have a surplus fiscal side of policy and acuity movement -- a qe movement on monetary policy. it's not the kind of thing that most people would see. that's where the question comes from. the scales are so heavily skewed into the accommodative side of monetary policy. i wouldn't say austerity. it's not the correct term. but very much a tight sort of budget with regards to how the fiscal side has been run. politically, it wouldn't play out. i think you have to wait till may next year when the australian budget is handed down , where the treasury will get the dirt -- the delivery surplus. it's a question of whether or not the future tax cuts that have been legislated get brought forward, whether the $100 billion aussie of infrastructure

spending can be brought forward further. all of that will happen. it's just a question of time. politically, time doesn't always move that fast. we probably have to wait till may next year, when the budget is delivered. paul: we are getting perilously close to another election year after that. if i could return to your thoughts on rba optimism, first we have to get the cash rate down to 0.25% and the threshold for potential qe is very high. considering the growth forecast, getting revised downward, the r.b.i. typically likes to cut and see what happens, we could get to 0.25% pretty quickly. when do you think we might see those measures? >> i would agree. it, if if you look at they do want to give the absolute last boost in using the cash rate as their letter, it would probably done -- lever, it

would probably done by september. april through august, things get quite slow. i think they will push the button for the next one either february or march. they will hope they don't have to do it again. it gives them a chance to really evaluate leading into 2020 christmas, a period that tends to be good on the consumption side. a pickup. can justify they would also tend to see claimant growth in october -- employment growth in october. i think they are going to go early, get it to the level they need to, then reevaluate. they may go through the path we saw 2016 midway through this year, not moving the cash rate at all.

seeing if there is any form of recovery before they push the button on qe. listening to most economists, qe likelyooks like a fairly possibility, sitting at around 45% across the board. paul: one thing we've seen recovering his house prices. -- is house prices. the asx getting around record highs as well. i guess the chilling question is, we do a correction bashar we -- are we due a correction? >> monetary policy is unlike the fed, the ecb, or the boj. it doesn't have as much of a global flow-through as those three. the asset prices are likely to continue to appreciate. whether that comes through with regards to the numbers is a different story. the ability to actually continue

to push up asset prices, whether it is housing or equity, is going to continue. the other thing i will say, and i know we've been slightly pessimistic, it may not be as bad as what's been forecast. things will slow down. they won't meet the very optimistic view of the rba. i'm not of the view that it's going to collapse or we will see rid fed -- see recession. i do not think we will see a period where disinflation comes in all across the board. things are ok, not brilliant. they are ok. better thanlightly forecast expectations on the economics, very accommodative monetary policy, what that means you have asset prices on their way up, but there's a possible boost to numbers. there's a possibility that 2020 could be as good as 2019, off the idea that asset prices are ,eing thoroughly supported

including by slightly better than forecasted economics. paul: a nice note of optimism there. thanks so much for joining us. let's check in on the first word news. japan may re-embrace the power of public spending. with one of the biggest stimulus packages of the era. slowing growth, higher sales tax, and a string of natural disasters have given the government reasons to shift towards physical measures and ultra-loose monetary policy. that would be welcome news for the bank of japan, which has been reluctant to ramp up its own long-running stimulus program. president trump has made an unannounced trip to afghanistan to celebrate thanksgiving with u.s. troops. two president and half guarding met president-- he ashraf ghani. he confirmed he wants to reduce troop levels to around 8500 from

the current 12,000 and may go further. president trump is facing a new challenge from north korea after the launch of what is reported to be a super large missile. ews says that nork has tested a multiple rocket hascher having -- the north tested on multiple rocket launcher. they want the u.s. to offer concessions. thousands of protesters gathered in central hong kong thursday night for a thanksgiving rally to celebrate u.s. legislation that requires annual reviews of the city' autonomys. hours earlier, china repeated its threat to retaliate when president trump signed the bill into law. the foreign ministry said no one should underestimate china's resolve to safeguard national sovereignty. global news, 24 hours a day, on air and @ tictoc on twitter,

powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: still to come, as stores brace for black friday, we will look at the trends shaping up in retail in asia and beyond. surprise trump's thanksgiving visit to afghanistan. this is bloomberg. ♪ omberg. ♪

paul: i'm paul allen in sydney. you are watching "daybreak: australia." president trump has made an unannounced trip to afghanistan and says peace talks with the taliban have resumed. we have more on this story. what did we learn from president trump's surprise visit to afghanistan? to theident trump went

air force base in afghanistan and served up new peace talks as well as turkey and mashed potatoes to the troops. it seems like ages since the secret talks with the taliban at camp david were scrapped by trump, but it was only september. now he seems like he is restarting the talks. details are pretty unclear. so many times, on foreign policy, trump will make an announcement, make a big splash, as he did today, and then leave his deputies and his various sherpas and aids to cobble together the details -- and aide s to cobble together the details. trump has strong motivation to do this. he wants to see our troop levels drawn down in afghanistan, as you mentioned. the u.s. has been there for 18 years. but the positive thing from today, he met with afghan president ashraf garney -- president ashraf ghani. in many respects, this is a

typical commander-in-chief trip to visit troops at thanksgiving. various presidents have done that over the years. it's possible something long-lasting could come out of today's action. paul: was it a typical trip, though? it had kind of an interesting backstory, didn't it? >> very interesting, if you think that, at this time yesterday, everybody forgot president trump was still at his mar-a-lago resort in florida. he was there yesterday morning. he played golf. after it got dark on wednesday evening, he was taken off the property. he went to an airstrip. we don't know which one. it wasn't his usual airstrip at west palm beach. he flew back to washington. the whole separate press corps came and flew with him to afghanistan. a very secretive trip, which the white house said reflects the fact that conditions are so dangerous. they want to keep the president safe. even in flight, the reporters,

our reporter who was traveling with trump didn't know where they were going. they kinda thought it was the middle east, but didn't know whether it was afghanistan or somewhere else. a lot of cloak and dagger involved in those preparations. very interesting spy stuff, really. paul: let's move to another of president trump's foreign policy fronts, north korea firing what appears to be a couple of short range ballistic missiles on thursday. ass is a move that has come it threatens to walk away from nuclear talks which have really stalled. they want president trump to offer some concessions by the year end. they don't seem to be forthcoming. why is pyongyang continuing to go to the u.s. like this? >> it seems like kim in north korea really thinks that coming at trump and coming at the u.s. from a strong position is the way to go. he has been encouraged to do this by the fact that, this

year, there have been so many of these short range ballistic missile launches, and trump has just brushed it off. it seems like there's some kind of redline in the president's mind that, if north korea doesn't cross, everything is ok. years pretty much on the nose since pyongyang tested an icbm capable of hitting the u.s., and trump thinks these short range missiles don't seem to be that big of a deal. his last comment to kim on twitter a couple weeks ago was kind of a breezy "see you soon," and no real suggestion the two have had a falling out from trump's point of view. we had an interesting comment negotiator from south korea who says kim considers trump as his political hostage. there's a lot of games and pressure on both sides. there remains to be seen if the

u.s. will change its position at all. with president trump in the air today, we didn't get his opinion on the matter. paul: ros, thanks so much for joining us. china has reiterated that it's going to take action following president trump's decision to sign a bill backing the protesters in hong kong. the key question is how beijing might hit back and what that might mean for trade talks. our correspondent, tom mackenzie, joins us now. we've had some fighting words from china, but no action. what have we seen? tom: some sharp rhetoric from beijing. we know the foreign ministry officials yesterday said, again accusing the u.s. of, quote-un quote, meddling in chinese affairs. they said they would take strong countermeasures, that they would retaliate, reiterating that message. they summoned the u.s. ambassador to china for the second time this week, to get

him -- give him a dressing down about some of these issues. the focus is whether or not it does derail these trade talks with the two sides looking to try to get an initial deal by the end of the year. there's this unofficial deadline in terms of those talks. we know both are continuing the conversation. the question is whether china puts in place measures to delay those conversations or takes der u.s.asures to hin businesses operating here. the rhetoric has been strong. we are awaiting the details when it comes to the action on the ground. paul: i guess china has to be careful in whatever actions it does take. what retaliatory tools are in the box that china could use? tom: it's a very difficult balancing act for china. when you look across all the data points, the economy is clearly under pressure. they are incentivized to get this phase one, initial deal done to relieve this economic

pressure. territorial issues are central and in many ways trump economics when it comes to china's priorities. they will want to at least continue the rhetoric and there may be some measures that push back to some degree on the u.s. what we've seen in the past on issues like huawei, to blacklisting of that company, china again has come out with rhetoric, but hasn't followed through in terms of concrete action. we are waiting to see what they do. some measures they could resort to include restricting rare-earth exports to the u.s. but there are also potential blowbacks to that as well. we know the u.s. is looking for additional supplies of rare-earth. they could look at restricting their purchases of u.s. goods, but many u.s. imports into china are already heavily tariffed as a result of the trade war. then there's the unreliable entities list that china has in

its back pocket for a couple of years. they could then publish that and that would restrict, in theory, some u.s. companies. this is a time when china is desperately trying to attract foreign domestic imports -- inflows in terms of investment. the idea that they will publish this unreliable entities list is questionable. none of the options are clear cut for china in terms of how they retaliate. the other area is the diplomacy. we talked about north korea. they could go some way to reading back on the sanctions they are helping to enforce on north korea and iran. they could make it much more difficult. none of these options are very clear cut for china, and most of them have the potential for some blowback as well. paul: china correspondent tom mackenzie in beijing, thanks very much. you can get around other stories you need to know to get your day going in today's edition of "daybreak."

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♪ paul: let's check business flash headlines. morgan stanley has fired or placed on lead at least -- placed on leave at least for traders. traders. the bank has opened an investigation into the issue, which deals with emerging markets. ♪ australian realtor cromwell properties has forced a third candidate onto the board, singapore's ira asset management

was defeated. the ira proposal came during a campaign to change cromwell business strategy and boost share value. plenty more to calm on "daybreak australia." stay with us. this is bloomberg. ♪

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in sydney, kind of a gloomy day here. i'm paul allen in sydney. you are watching "daybreak australia." on first word news with tom mackenzie. tom: india bracing for a growth shock. data will likely show the economy is at its weakest point in more than six years. the upcoming figures are expected to show gdp following low the psychologically

important 5% level after months of downbeat data from plunging car sales, to shrinking factory outlets and slumping exports. opec and its independent allies are sending more signals they will stick to output curves at their meeting last week. a key midi meeting in vienna was told the oil market will be balanced year if the cartel maintains current production levels. meeting in moscow gave no indication of supply change. u.k. prime minister boris johnson says he will walk away from a trade deal with the united states of president trump insists that the national health service is part of negotiations. johnson refused to attend day tv debate on climate change with other leaders including labor's jeremy corbyn. new government of sri lanka

says it intends to review the previous administration's plans that leave a southern port to a venture in china. part to a southern venture in china. the government says it will be hard to take out loans to fund the project. the china belt and road initiative is allegedly luring poorer countries into debt traps. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm tom mackenzie. this is bloomberg. ♪ paul: thanks very much for that, tom. let's look at how we are shaping up for trading in asia. we have new zealand trading higher by three quarters of 1%, australia opening at the top of the air -- top of the hour, futures they are looking positive. a different story around the rest of the region, the cost -- the kospi looking flat. from japan we will have the

jobless rate, tokyo cpi numbers and industrial production for october as well. we will bring you those numbers as they break. shouldet more on what we be watching with global markets editor adam haigh. let's talk about chinese markets, suffering more than u.s. assets. who is winning the trade war, and what might happen here, especially in context of the hong kong bill? adam: indeed paul. earlier in the year you saw correlation between chinese markets and u.s. markets and now you are seeing the weakness come off a little bit. it shows clearly here on this tv chart that we have -- g chart. the story this year is that you have had a very strong performance from u.s. assets. u.s. equities have done well, the dollar remains resilient and you had great capital returns

from your treasury positions as well. a june-july is time, weakness in the shanghai composite of -- shanghai composite index on the equity side, also seeing weakness in the currency there, and bonds haven't been performing as well. it tells you a lot about what people expect going forward, that maybe the downside now is more on the chinese side than it is on the u.s.. but of course, it comes down fundamentally to what is driving the growth trajectory in both of these places. and with the fed on hold and the u.s. economy looking mixed, the chinese economy continues in this downward trend where policymakers are trying their utmost to keep supporting it there, so going into 2020, it feels like we have gone through that inflection point and now you are seeing that increase in the weakening correlation between the two markets. about the south korean sovereign wealth fund and its allocation to equities.

paul.it is a small move, we don't want to exaggerate too much, but it is certainly coming back in its equities position. it is dialing back a little bit of that risk is issue. and it comes at a time, as you see on this chart, when global equities have hit a fresh record. you have a lot of really strong returns over the last 12 or 24 months already baked into valuations, pushed up pretty high, but this is an example of a sovereign wealth fund that is dialing back risk. there are many other examples we could point to over the last three or six months that have chosen to milan moves, take a equity,it out of

increasingly more invested in income positions as the global economic cycle ages, and investors worry about return potential and staying in equities too long. bloomberg global markets editor adam haigh, thanks for joining us. ,go. otherhe gtv bloomberg terminal. markets anchor yvonne man joins us from hong kong. hkma's, you spoke to howard lee. yvonne: we spoke to howard lee hours after president trump signed the hong kong bill into legislation. he said it is not good news when it comes to the market. we saw the market reaction. they basically took it in stride. he said he was talking to a lot of bankers and market

participants out there who say at this point, it is too early to speculate what this means for the hong kong special trading status. they don't want to look at the worst-case scenario so far, because it all depends on how the u.s. is going to enforce this type of legislation, which basically allows the u.s. now to assess at least once a year hong kong's at on a me from china in order to justify that special status. here is more of our conversation. >> this is not welcome news. you can see the market reaction so far has been pretty calm, so to speak. because a lot of bankers and market participants that i have , they view the immediate impact of the bill is not going to be viewed poorly in the time being. yvonne: do you foresee any pick up if the protests drag on?

howard: we haven't seen outflow of the hong kong since april of this year. started in of unrest june, so there is no outflow of the hong kong dollar in the past two months. if you look at other metrics, for example hong kong dollar deposit, it is pretty stable in the past few months. yvonne: but the economy has entered into a recession. we see a triple threat from a global slowdown, this trade war, and now the domestic situation. is this any different? because you mentioned markets are showing some signs of stress, but nowhere near anything extreme. break the, then, foundation? howard: we are going through some difficult period. this is something we need to be concerned about. various measures have been launched to help the economy, including the fme's.

we have a platform to discuss as to the fme the government launched, a new loan guarantee scheme. yvonne: how would it affect the banks? do you see that hurting asset quality? howard: not really, because in terms of asset quality of banks, the hong kong banking sector has been very strong. the capital ratio is 20%, which is much higher than the statutory minimum. in terms of loan quality, so far the loan ratio is only 0.56%, very low by historical standards in hong kong as well as in comparison with other places -- other places. yvonne: what a weaker economy force you to tweak your peg? howard: absolutely not. if you remember the attack was

introduced 36 years ago. in the 36 years we went through a lot of different cycles. we went through the asian financial crisis. we went through the global financial crisis. we also went through this fast period, where hong kong went through deflation for some six years. so the peg has proven that it will survive. more thane 30-year-old hong kong dollar peg seems to be solid right now, and the bedrock of why hong kong has maintained its financial hub status. that is the take from howard lee. i did ask him about the measures we have seen so far from banks sending credit to small and medium businesses. is that going to be enough to ease the pressure on these businesses, because we have seen the retail sector, tourism sector, get really hurt here and drag the economy into a recession. he says he is still looking to

see what the effects of these latest measures are, but said they will look to see if further measures are needed as well. paul. paul: yvonne, thanks very much for that. don't forget, if you are a way from a screen you can still find in-depth analysis on bloomberg radio, not broadcasting live from our brand-new studios in hong kong. you can leave on the -- listen on the outcome of bloomberg radio plus, or bloomberg.com. this is bloomberg. ♪

♪ paul: i am paul allen in sydney. you are watching "daybreak australia." after thanksgiving is america's biggest shopping day known as black friday. with thanksgiving falling on the latest possible date, only 26 shopping days remain until christmas. despite that, the national retail federation expects more than 165 million black friday

shoppers this year, each spending over $1000. some say the hype over black friday has fizzled because the shopping season has become so spread out. on average, americans have completed almost a quarter of their shopping. that means fewer dollars for black friday. joining us to explore, we have partner melanie sanders, she has 14 years of experience across a range of product categories. melanie, things are joining us. i want to explore the phenomenon of black friday. we are seeing ads in australia and spreading into asia. is this another example of an american cultural tradition turning into something more global? yes, we are seeing it spread across many geographies, including my own and yours, paul, in australia. you only have to walk down high street and see the number of black friday signs in front of

windows at retail stores. i think it is broader than a u.s. cultural phenomenon. it is in, not -- it is an amazon phenomenon, in that that they have colonized black friday around the world. we had it in australia in 2017. it is our observation that black friday has grown in prominence as a retail sales event since amazon entered. that is true of many other geographies where amazon has a large presence. paul: as i was saying in the set up, what do these enormous sales days mean for the retail sector? do consumers end up buying more as a result, or do the purchases get spread out over a longer time period? melanie: it is hard to say. we are seeing some sales get pulled forward, particularly in categories like consumer electronics, given its proximity to christmas.

so we do see some impact in big sales event that we have at the end of the year, but the data is still given that on that, black friday is still fairly new to countries like australia. we have just, received on our instant messaging platform a question from a viewer asking, in asia, is there a shift from store purchases on black friday to online purchases on cyber monday? i think because in asia, black friday is so approximate two another day that singles'ack friday, day. singles' day this year was around 839 billion dollar event for alibaba alone in a single day. this is the black friday sales

period, which is about $30 billion for the u.s.. so i think the fact that singles' day is so approximate, you don't see the bump you have seen in other markets. certainly, black friday has been a strong event for other online retailers looking to get some but we see it equally both online and off-line as a sales event. paul: i know you consider the to whatector in asia, extent is this a mainly chinese phenomenon. because we had week sales data yesterday and hong kong problems are well publicized. is china really carrying the torch for the asian consumer at the moment? interestingly,, actually, the highest growth rate has that growth rate has been in south korea, which some would say is a more mature

market then china in terms of retail. but china is a very large force, the scale of the china market, and it is growing, continually in double digits, so it is doing very, very well. but i think the broader phenomenon is the growing middle class in asia, so markets like india, like vietnam growing up 14%, malaysia, indonesia, are still very orient markets -- very boyette -- they are still very boyette markets -- very bouyent markets. paul: when you think retail and asia peaks? melanie: hard to say. wish i had a crystal ball. the evolution of retail in asia is going to change in terms of what is driving it. in the last 10 years, it has been 100 30 million households added to the middle class in

china. take that market as a case study. we predict there will be more like 55 million as opposed to 130 million of middle-class households added to the economy over the future years, and the global contribution to disposal incomes is only going to increase by about 5%. a it is becoming more of share of wallet and consumption for individual gain, more than a penetration gain, where in the past decade it has just been more about getting access to that growing middle class. increasingly where seeing that retailers now really need to focus on refocusing their penetration and going for the consumer base. that is going to mean they need different strategies going forward. the pointg back to you made about the amazon role of spreading the phenomenon of

black friday globally, here in australia there were a lot of nervous moments among retailers and the buildup to the amazon launch, but there wasn't a nuclear bomb everybody was expecting. have you found amazon in australia to be underwhelming? melanie: i agree. the general sentiment was that the launch of amazon underwhelmed. however, amazon would say it is one of their most successful launches globally. they do have a significant business here now, probably about a 2% market share. we predict over five years it gets to somewhere between 5% and 8%, and further consensus about what kind of marketshare it achieves. what is interesting about amazon is the impacted as haad-on the incumbent retailers that are already in this market. had onimpact it has incumbent retailers that already in the market. they are improving their delivery performance, service

levels to customers, the extent of range that they have, and certainly their pricing. so i think that while amazon itself has really got a toehold only in the australian market, the impact on australian retail has been quite profound in terms of the acceleration in terms of online, and the response it generated in the existing retail base. paul: yes, to your point it is interesting, harvey norman is one of the most shortest stocks on the asx and share prices are up 40% this year. keeping that example in mind, how do you view the broader retail space in australia? we have had now five years of slowing retail growth in australia. it certainly hasn't been easy for the retail economy. we know the latest economic slowdown has been one of the subsets of our economy that has been most impacted. everybody iso say suffering equally.

there are certainly retailers that continue to perform very strongly. and then coupled with that, we have seen real price deflation. when you look at price inflation relative to cpi, and just about every subsequent -- every subsegment, it in real terms, there has been deflation. those two economic drivers are making it tougher for australian retailers, no doubt. company partner melanie sanders, thanks for joining us today. you can watch us live on our --eractive tv function, tv, . this is blumberg. ♪

♪ paul: i'm paul allen in sydney,

and you are watching "daybreak australia." after two interest rate cuts this year, all 36 economists surveyed by bloomberg see the bank of korea likely to stay put. columnistopinion daniel moss joins us from singapore. daniel, no change today expected from the bank of korea. have we seen the end of the rate cuts? it, paul.doubt korea's economic slowdown is far too pronounced for the bank of korea to leave it here. mind you, if they wanted to send a policy signal, a show of intent about the gravity of the situation, a cut today would certainly do that. we are talking about a very conservative organization. people say by nature central banks are conservative, the bank of korea took a long time to cut. i the time they actually cut in july, basically every central bank of consequence in asia, and

some of little consequence, had already been cutting. so korea come -- korea came late to the party and they don't appear to be in any rush. paul: considering the dire circumstances korea is facing, why isn't be ok -- isn't bok going guns blazing right now? daniel: i think they are hoping the international economy will do it for them. the abatement of regulations, the interest rate cuts in the united states and in the euro zone will do some of the lifting, in terms of global sentiment. i doubt this is the floor for the bank of korea. they are taking their time, though. for the global situation to improve is one thing, but there are still plenty of structural issues at home, as you discovered on a

recent trip there. what did you find out? daniel: that is right. right now we are seeing cyclicals, and all major exports are suffering from the same kind of problems. of it, what ails korea is not monetary policy that is able to be fixed. most of our listeners are familiar with japan's demographic challenges. in some ways, korea's are more severe. they have an aging population. they have a utility rate that is the bottom of the oec. japan's looks hearty by comparison. and the countryside is emptying to such a degree that half the seoultion lives in the area. we have heard about the urban-rural divide. this is an extreme example. in korea needs to have a conversation about what it wants its population to do. paul: bloomberg opinion

columnist daniel moss, thanks. we have plenty more ahead in the next hour of "daybreak asia." we will break down economic data from tokyo and seoul and discuss economic data with nicholas smith. this is blumberg. ♪

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♪ paul: good morning. we are under one hour away from the market open in japan and south korea. i'm paul allen sydney. yvonne: i'm yvonne man in hong kong. welcome to "daybreak asia." ♪ paul: our top stories this friday, the power of public standing, japan ready to embrace big stimulus programs to boost the economy and raise inflation. hong kong protesters give thanks to u.s. support as